The US government is considering additional measures to prevent Chinese developers from accessing US-made AI semiconductor chips via third parties.
according to a report From Reuters On October 13, people familiar with the matter said the Biden administration was targeting a loophole that allowed developers in China to buy chips from the notorious Huaqiangbei electronics zone in Shenzhen, a city in southern China.
Sources reportedly claim that additional rules regarding AI chips will be issued this month and will apply restrictions previously applied only to top US players such as Nvidia and AMD but more broadly to all companies producing similar materials on the market.
Over the summer, the US government implemented additional rules on the largest chipmakers, including Nvidia, which currently leads the market in chip manufacturing. It asked companies to limit their exports of high-end semiconductor chips to “certain” Middle Eastern countries, among other small details.
However, US regulators have since denied explicitly blocking exports of AI chips to the Middle East.
In response, Nvidia warned regulators that long-term revenue results could be “harmed” if the company were “effectively excluded from all or part of China.” The majority of Nvidia’s revenue comes from the United States, China, and Taiwan, while less than 14% comes from all other countries combined.
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Reuters sources said the Biden administration is also trying to troubleshoot a loophole that would allow Chinese parties to access American cloud service providers such as Amazon Web Services (AWS). According to the report, these solutions seem “less clear.”
In July, US officials reportedly began examining restrictions on access to cloud computing services such as AWS by Chinese companies in an attempt to protect the country’s advanced technology.
The United States implemented initial export controls on its most powerful semiconductor chip technology in October 2022.
Since then, Washington has tightened measures and is still considering additional measures to further limit the computing power of chips available in the Chinese market.
China also acted in response to tougher measures by the United States. In July, it said it would control exports of gallium and germanium, two materials essential for the production of artificial intelligence chips.
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